Constantinopole Smugglers Capital for EU-Bound Illegal Immigrants - THIS IS A MUST READ

The article by Nikolaj Nielsen in the EUObserver is indeed an eyeopener. It should inspire European authorities to conduct a thorough investigation into these crime networks. If it was that easy for a reporter to unearth such information, then it will be child's play for authorities to infiltrate into these so called crime rings. Greece has to stop being Europe's "trash bin" for the illegal trafficking of people. Something has to finally be done about it, the citizens of Greece have had enough, as have the citizens of Europe. If European authorities do not want another crisis on their hands, then they have to act... and NOW.

From what we learn, member states until recently had no legislation to address the issue. People involved in the transport, recruitment and exploitation of trafficked victims can face up to 15 years in prison but there are not measures to fight this ongoing crime. The most frightening part of all of this is that we read that preliminary data gathered by Eurostat notes that the number of people brought to justice between 2008 and 2010 has declined. This is frightening since we know that the trafficking of people into our own country increased in the same period by ten-fold!

Another frightening statistic that was also documented by Eurostat claims that in the same period approximately 79 percent of the victims were apparently women and girls, with three-quarters of them trafficked for sex. If this doesn't sound an alarm then we do not know what should. This is why there has been an explosion in the AIDS epidemic in Greece. Most of these women are being exploited and therefore very vulnerable to be infected with the disease.

The point of this article is certainly LOUD and CLEAR: Slavery is far from dead, there's not enough being done about it and the EU has done little to face this new crisis. If you look at the figures which are posted by activists on the web -from various such sites- there are more slaves in the world today than at any other point in history, with estimates ranging from 12 to 27 million, and we're not talking about those laboring for less than a dollar a day in developing countries or choosing to charge thousands for an hour of barbaric sex. The statistic refers only to those who truly have no choice. Our opinion here at HellasFrappe therefore is that the EU should really think about that before it begins accession talks with Turkey. Accepting this crime and not cracking down on the culprits behind it will only make EU officials an accessory in this tragedy.


By Nikolaj Nielsen
EUObserver via infognomonpolitics

Istanbul - Many of the groups which smuggle people into Europe are based in the migrant quarters of Turkey's vast city on the EU border - Istanbul.

Kumkapi in Istanbul's Fatih district on the Marmara Sea coast is home to French speaking African communities and to Somalians. Further west, Afghans and Iranians cluster in Zeytinburnu. Iraqis and Nigerians live mostly in Kurtulus, near the tourist hotspot of Taksim Square. Syrians favour parts of Kucukcekmece. In Kumkapi, one smuggler hotspot is a street which runs parallel to the Katip Kasim mosque. Here, young African men work by pushing around heavy loads of various goods among run-down buildings, dozens of which house Russophone import-export firms.

A white Mercedes GL 320 with Ukrainian plates is parked outside the Blue Marmaray hotel. It is in the heart of the impoverished district, but a suite costs $600 a night. Further north and east, clothes shop windows display prices in Turkish and Russian.

The locals call the smugglers "kacakci." It is a term predominantly used by Kurdish, Turkish and Asian people who move migrants through Turkey into Europe.

Each ethnic group has its own kacakci networks.

A diplomat who works on security issues at the Athens embassy of a large EU member state, said some of the big kacakci operations have cells in Europe which work in such a way that they cannot be linked to the parent group if they are infiltrated by police or intelligence officers. They also operate separate departments, each of which specializes in a particular activity - for instance, one does drug smuggling, while another one does human trafficking. They never mix.

Opinion is divided on the role of the Turkish or Russian mafia.

Anna Triandafyllidou - a professor at the Robert Schuman Centre for Advanced Studies in Florence, who co-wrote a book on migrant smuggling - says there is no evidence linking the mafia to the smugglers, which are loose operations run by people of the same ethnicity as the people they smuggle. "There is no overarching international structure that takes you from Afghanistan to Greece, having taken care of everything," she told this website.

For his part, Michel Koutouzis - a Paris-based narco-trafficking expert of Greek descent - says the business is dominated by Turkish mafia families, who make tens of millions of euros out of it each year. He said the families are organised like an army with a godfather-type figure, called a "baba," at the top of the structure. They do not work directly on smuggling operations. But they host them and oversee them. They also provide local knowledge, contacts and the infrastructure to help people move around. "People in Istanbul know everything about you before you even arrive - how much money [you have], who is bringing you, the transport means are already organised," Koutouzis told EUobserver.

The Athens-based diplomat said non-Turkish kacakci need local support to successfully bribe Turkish officials. "It's without a doubt that the networks need to find corrupt officials, either to obtain papers or to ensure local authorities don't stop them," the contact noted.

Meanwhile, Triandafyllidou described some of the methods used to get people into the EU. She said that every migrant's journey is divided into stages.

Kacakci cells hand the people from one cell to the next at each stage, using disposable mobile phones to co-ordinate the operation. The migrant hands over cash at the beginning of each new stage. Sometimes, he may have to pay a percentage up front and then the rest on arrival. "Trust plays a very important part. The way to get it is that you pay half in advance and half when you arrive," said Triandafyllidou.

In Istanbul's Zeytinburnu district, kacakci are charging - as of November 2012 - up to €1,500 to smuggle an Afghan migrant into Greece. An Afghan national who works with Afghan smugglers in the neighbourhood, but who asked to remain anonymous because of the dangers involved, said the migrants are recruited in Afghanistan. "They take them up through Iran and into Istanbul. They then house them [in Istanbul] for a few days before taking them to Izmir where they cross on boat," the source told this website.

The Afghan migrants pay 20 percent up front in Istanbul and the rest when they reach their final destination. Those who run out of money in Istanbul try to raise extra funds by doing cash-in-hand low-skilled labour. But smuggler groups who also traffic drugs do not use them as mules because their risk of being stopped by border guards is greater.

For the whole trip from Kabul to Athens, the estimated price is from €5,000 to €8,500, depending on the quality of the services and whether obstacles arise along the way.

The Research Institute for European and American Studies in Athens estimates that one in four irregular migrants rely on smuggling networks to enter Turkey and then to go to the EU.

Frontex, the EU border control agency in Warsaw, says 18,000 people were detected crossing the border illegally in the third quarter of 2011. Nearly 50 percent were Afghan nationals. If the estimated prices are correct, it means that Afghan smuggler networks in Istanbul made well in excess of €3.5 million over those three months alone.

Whenever Greece or the EU take fresh steps to insulate the border, it means more money for the gangs.

Prices to cross the River Evros - which flows along the Greek-Turkish border - soared after Greece launched Operation Shield - the deployment of an extra 1,800 border guards in August. They are going up again because of the completion in December (2012) of a razor wire fence on the Greek-Turkish land border. "Because of our fence, migrants are paying a lot more than they did over the summer," Pashalis Syritoudis, the director of police at the Greek border town of Orestiadas, told EUobserver. "Before 'shield' they paid around €300 per person [to cross the river]. Now it is €3,000 to €4,000 person," he noted.

Drug Trafficking Ring Case - 57 Set To Face Criminal Charges (VIDEO)

The number of people arrested for their involvement in a drug trafficking ring in the northern cities of Thessaloniki, Volos and Agrinio has so far reached 35. Police reports said that a further four policemen were added to the three already arrested and implicated in this case, including the head of a counter-narcotics division in Volos. The statement from the police department added that in all 57 people are going to face criminal charges related to drug trafficking; of these, 43 were active members of the ring, while 14 were collaborators.

Thessaloniki police chief Athinagoras Pazarlis revealed that the ring was led by two 34-year-olds and a 29-year-old man, all of Albanian nationality, and distributed at least 400 kg of marijuana, 20 kg of heroin and 1 kg of cocaine from Balkan countries in Greece.

Policemen involved in the ring worked with traffickers to frame others as drug dealers, Interestingly, the traffickers would then be "rewarded" by those they aided, by collecting either 10,000 Euros or drugs. According to a dispatch from the state news agency, some of those benefitting from the scheme were even prisoners, whose "tips" would help them reduce their jail sentences at court hearings.

In total, 35 people appearing before the Thessaloniki prosecutors under heavy security measures were indicted and given a date for their deposition.

Fraud, Money Laundering and Narcotics. Impunity of the Banking Giants. No Prosecution of HSBC

HSBC  Mexico. (Photo Wikipedia)

By Tom Burghardt
Global Research

In another shameful decision by the US Department of Justice, earlier this month federal prosecutors reached a deferred prosecution agreement (DPA) with UK banking giant HSBC, Europe’s largest bank. Shameful perhaps, but entirely predictable. After all, in an era characterized by economic collapse owing to gross criminality by leading financial actors, policy decisions and the legal environment framing those decisions have been shaped by oligarchs who quite literally have “captured” the state.

Founded in 1865 by flush-with-cash opium merchants after the British Crown seized Hong Kong from China in the aftermath of the First Opium War, HSBC has been a permanent fixture on the radar of US law enforcement and regulatory agencies for more than a decade. Not that anything so trifling as terrorist financing or global narcotrafficking mattered much to the Obama administration.

As I previously reported, (here, here, here and here), when the Senate Permanent Subcommittee on Investigations issued their mammoth 335-page report, “U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History,” we learned that amongst the “services” offered by HSBC subsidiaries and correspondent banks were sweet deals, to the tune of hundreds of billions of dollars, with financial entities with ties to international terrorism and the grisly drug trade.

Charged with multiple violations of the Bank Secrecy Act for their role in laundering blood money for Mexican and Colombian drug cartels, as a sideline HSBC’s Canary Wharf masters conducted a highly profitable business with the alleged financiers of the 9/11 attacks who washed funds through Saudi Arabia’s Al Rajhi Bank.

While the media breathlessly reported that the DPA will levy fines totaling some $1.92 billion (£1.2bn) which includes $655 million (£408m) in civil penalties, the largest penalty of its kind ever levied against a bank, under terms of the agreement not a single senior officer will be criminally charged. In fact, those fines will be paid by shareholders which include municipal investors, pension funds and the public at large.

With some 7,200 offices in more than 80 countries and 2011 profits topping $22 billion (£13.6bn), Senate investigators found that HSBC’s web of 1,200 correspondent banks provided drug traffickers, other organized crime groups and terrorists with “U.S. dollar services, including services to move funds, exchange currencies, cash monetary instruments, and carry out other financial transactions. Correspondent banking can become a major conduit for illicit money flows unless U.S. laws to prevent money laundering are followed.” They weren’t and as a result the bank’s balance sheets were inflated with illicit proceeds from terrorists and drug gangsters.

Revelations of widespread institutional criminality are hardly a recent phenomenon. More than a decade ago journalist Stephen Bender published a Z Magazine piece which found that “99.9 percent of the laundered criminal money that is presented for deposit in the United States gets comfortably into secure accounts.”

According to Bender: “The key institution in the enabling of money laundering is the ‘private bank,’ a subdivision of every major US financial institution. Private banks exclusively seek out a wealthy clientele, the threshold often being an annual income in excess of $1 million. With the prerogatives of wealth comes a certain regulatory deference.”

Such “regulatory deference” in the era of “too big to fail” and its corollary, “too big to prosecute,” is a signal characteristic as noted above, of state capture by criminal financial elites.

Indeed, HSBC’s private banking arm, HSBC Private Bank is the principal private banking business of the HSBC Group. A holding company wholly owned by HSBC Bank Plc, its subsidiaries include HSBC Private Bank (Suisse) SA, HSBC Private Bank (UK) Limited, HSBC Private Bank (CI) Limited, HSBC Private Bank (Luxembourg) SA, HSBC Private Bank (Monaco) SA and HSBC Financial Services (Cayman) Limited. All of these entities featured prominently in money laundering and tax evasion schemes uncovered by the Senate Permanent Subcommittee in their report. Combined client assets have been estimated by regulators to top $352 billion (£217.68).

According to Senate investigators, HSBC Financial Services (Cayman) was the principle conduit through which drug money laundered through HSBC Mexico (HBMX) flowed. “This branch,” Senate staff averred, “is a shell operation with no physical presence in the Caymans, and is managed by HBMX personnel in Mexico City who allow Cayman accounts to be opened by any HBMX branch across Mexico.”

“Total assets in the Cayman accounts peaked at $2.1 billion in 2008. Internal documents show that the Cayman accounts had operated for years with deficient AML [anti-money laundering] and KYC [know your client] controls and information. An estimated 15% of the accounts had no KYC information at all, which meant that HBMX had no idea who was behind them, while other accounts were, in the words of one HBMX compliance officer, misused by ‘organized crime’.”

In fact, the “normal” business model employed by HSBC and other entities bailed out by Western governments fully conform to the “control fraud” model first described by financial crime expert William K. Black.

According to Black, a control fraud occurs when a CEO and other senior managers remove checks and balances that prevent criminal behaviors, thus subverting regulatory requirements that prevent things like money laundering, shortfalls due to bad investments or the sale of toxic financial instruments.

In The Best Way to Rob a Bank Is to Own One, Black informed us: “A control fraud is a company run by a criminal who uses it as a weapon and shield to defraud others and makes it difficult to detect and punish the fraud.”

“Control frauds,” Black reported, “are financial superpredators that cause vastly larger losses than blue-collar thieves. They cause catastrophic business failures. Control frauds can occur in waves that imperil the general economy. The savings and loan (S&L) debacle was one such wave.”

Indeed, “control frauds” like HSBC “create a ‘fraud friendly’ corporate culture by hiring yes-men. They combine excessive pay, ego strokes (e.g., calling the employees ‘geniuses’) and terror to get employees who will not cross the CEO.” In such a “criminogenic” environment, the CEO (paging Lord Green!) “optimizes the firm as a fraud vehicle and can optimize the regulatory environment.”

In their press release, the Department of Justice announced that HSBC Group “have agreed to forfeit $1.256 billion and enter into a deferred prosecution agreement with the Justice Department for HSBC’s violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA).”

“According to court documents,” the DOJ’s Office of Public Affairs informed us, “HSBC Bank USA violated the BSA by failing to maintain an effective anti-money laundering program and to conduct appropriate due diligence on its foreign correspondent account holders.”

The DOJ goes on to state, “A four-count felony criminal information was filed today in federal court in the Eastern District of New York charging HSBC with willfully failing to maintain an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent affiliates, violating IEEPA and violating TWEA.”

However, “HSBC has waived federal indictment, agreed to the filing of the information, and has accepted responsibility for its criminal conduct and that of its employees.”

In other words, because they accepted “responsibility” for acts that would land the average citizen in the slammer for decades, those guilty of “palling around with terrorists” or smoothing the way as billionaire drug traffickers hid their loot in the so-called “legitimate economy,” got a free pass. In fact, under terms of the agreement DOJ’s “deferred prosecution” will be “deferred” alright, like forever!

Why might that be the case?

The New York Times informed us that state and federal officials, eager beavers when it comes to protecting the integrity of a system lacking all integrity, “decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.”

Keep in mind this is a “system” which former United Nations Office of Drugs and Crime director Antonio Maria Costa told The Observer thrives on illicit money flows. In 2009, Costa told the London broadsheet that “in many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor.” Costa said that “a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.”

Glossing over these facts, Times’ stenographers Ben Protess and Jessica Silver-Greenberg, cautioned that “four years after the failure of Lehman Brothers nearly toppled the financial system,” federal regulators “are still wary that a single institution could undermine the recovery of the industry and the economy.”

“Given the extent of the evidence against HSBC, some prosecutors saw the charge as a healthy compromise between a settlement and a harsher money-laundering indictment. While the charge would most likely tarnish the bank’s reputation, some officials argued that it would not set off a series of devastating consequences.”

Devastating to whom one might ask? The 100,000 Mexicans brutally murdered by drug gangsters, corrupt police and Mexican Army soldiers whose scorched-earth campaign kills off the competition on behalf of Mexico’s largest narcotics organization, the Sinaloa Cartel run by fugitive billionaire drug lord Chapo Guzmán?

“A money-laundering indictment, or a guilty plea over such charges,” the Times averred, “would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.”

Many of the same lame excuses for prosecutorial inaction were also prominent features in the British press.

The Daily Telegraph reported that the “largest banks have become too big to prosecute because of the impact criminal charges would have on confidence in them, Britain’s most senior bank regulator has admitted.”

“In a variant of the ‘too big to fail’ problem, Andrew Bailey, chief executive designate of the Prudential Regulation Authority, said bringing a legal action against a major financial institution raised ‘very difficult questions’.”

“‘Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen and I’m not saying we are going to see… this is not an ordinary criminal indictment’,” Bailey told the Telegraph.

Echoing Bailey, Assistant Attorney General Lanny Breuer said the decision not to prosecute HSBC was made because “in this day and age we have to evaluate that innocent people will face very big consequences if you make a decision.”

This from an administration that continues to prosecute–and jail–low-level drug offenders at record rates!

“Breuer’s argument is facially absurd,” according to William K. Black. In a piece published by New Economic Perspectives, Black argues:

    Prosecuting HSBC’s fraudulent controlling managers would not harm anyone innocent other than their families–and virtually all prosecutions hurt some family members. Breuer claims that virtually all of HSBC’s senior officers have been removed, so his argument is doubly absurd. Mostly, however, Breuer ignores all of the innocents harmed by the control frauds. SDIs [systemically dangerous institutions] that are control frauds are weapons of mass economic destruction that drive global crises and are the greatest enemy of ‘free’ markets. They are also the greatest threat to democracy, for they create crony capitalism. We are all innocent victims of these control frauds–and the Obama and Cameron governments are allowing them to commit their frauds with impunity from criminal prosecutions. The controlling officers get wealthy without fear of prosecution. The SDIs controlled by fraudulent officers have to purchase an indulgence, but the price of the indulgence is capped by the ‘too big to prosecute’ doctrine at a level that will not cause it any real distress. Breuer’s and Bailey’s embrace of too big to prosecute should have led to their immediate dismissals. Obama and Cameron should either fire them or announce that they stand with the criminal enterprises and their fraudulent controlling officers against their citizens.

As Rowan Bosworth-Davies, a former financial crimes specialist with London’s Metropolitan Police observed on his web site, “When you get a bank which admits, like HSBC has just done, that it is nothing more than a low-life money launderer for Mexican drug kingpins, and when it serves powerful vested interests to get round internationally-ratified sanctions against rogue nations, what possible benefit is achieved by trying to pretend that they cannot be prosecuted and charged with criminal offences?”

“Oh, excuse me,” Bosworth-Davies wrote, “it might impact the confidence they enjoy? Whose confidence, their Mexican drug traffickers, their international sanctions breakers, their global tax evaders, or the ordinary, law-abiding clients who are entitled to assume that their bank will obey the laws imposed on them and will provide a safe place of deposit?”

“Confidence,” the former Met detective averred, “what bloody confidence can anyone have when they know their bank is an admitted criminal? When their money is deposited with a bank that breaks the criminal law at every possible opportunity, which cheats them at every turn, sells them fraudulent products, launders drug money, evades international sanctions, moves foreign oligarchs’ tax evasion, safeguards the deposit accounts of Third World dictators and their families, then what is that confidence worth?”

Instead, as with the 2010 deal with Wachovia Bank, federal prosecutors cobbled together a DPA that levied a “fine” of $160 million (£99.2m) on laundered drug profits that topped $378 billion (£234.5bn).

Although top Justice Department officials charged that HSBC laundered upwards of $881 million (£546.5m) on behalf of the Sinaloa and Colombia’s Norte del Valle drug cartels, federal prosecutors investigating the bank told Reuters in September that this was merely the “tip of the iceberg.”

In fact, as Senate investigators discovered during their probe, the bank failed to monitor more than $670 billion (£415.6bn) in wire transfers from HSBC Mexico (HBMX) between 2006 and 2009, and failed to adequately monitor over $9.4 billion (£5.83bn) in purchases of physical U.S. dollars from HBMX during the same period.

Assistant Attorney General Lanny A. Breuer, said in prepared remarks announcing the DPA that “traffickers didn’t have to try very hard” when it came to laundering drug cash. “They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account,” Breuer said, “using boxes designed to fit the precise dimensions of the teller windows in HSBC Mexico’s branches.”

While Breuer’s dramatic account of the money laundering process may have offered a gullible financial press corps a breathless moment or two, a closer look at Breuer’s CV offer hints as to why he chose not to criminally charge the bank.

A corporatist insider, after representing President Bill Clinton during ginned-up impeachment hearings, Breuer became a partner in the white shoe Washington, DC law firm Covington & Burling. From his perch, he represented Moody’s Investor Service in the wake of Enron’s ignominious collapse and Dick Cheney’s old firm Halliburton/KBR during Bush regime scandals. Talk about “safe hands”!

Appointed as the head of the Justice Department’s Criminal Division by Obama in 2009, Breuer presided over the prosecution/persecution of NSA whistleblower Thomas A. Drake on charges that he violated the Espionage Act of 1917 for disclosing massive contractor fraud at NSA to The Baltimore Sun.

More recently, along with 14 other officials Breuer was recommended for potential “disciplinary action” by the Justice Department’s Office of the Inspector General over the Fast and Furious gun-walking scandal which put some 2,000 firearms into the hands of cartel killers in Mexico.

“A Justice official said Breuer has been ‘admonished’” by U.S. Attorney General Eric Holder, “but will not be disciplined,” The Washington Post reported.

Breuer had the temerity to claim that deferred prosecution agreements “have the same punitive, deterrent, and rehabilitative effect as a guilty plea.”

“When a company enters into a deferred prosecution agreement with the government, or an non prosecution agreement for that matter,” Breuer asserted, “it almost always must acknowledge wrongdoing, agree to cooperate with the government’s investigation, pay a fine, agree to improve its compliance program, and agree to face prosecution if it fails to satisfy the terms of the agreement.”

As is evident from this brief synopsis, when it came to holding HSBC to account, the fix was already in even before a single signature was affixed to the DPA.

Without batting an eyelash, Breuer informed us that HSBC has “committed” to undertake “enhanced AML and other compliance obligations and structural changes within its entire global operations to prevent a repeat of the conduct that led to this prosecution.”

“HSBC has replaced almost all of its senior management, ‘clawed back’ deferred compensation bonuses given to its most senior AML and compliance officers, and has agreed to partially defer bonus compensation for its most senior executives–its group general managers and group managing directors–during the period of the five-year DPA.”

Yes, you read that correctly. Despite charges that would land the average citizen in a federal gulag for decades, senior managers have “agreed” to “partially defer bonus compensation” for the length of the DPA!

As Rolling Stone financial journalist Matt Taibbi commented:

“Wow. So the executives who spent a decade laundering billions of dollars will have to partially defer their bonuses during the five-year deferred prosecution agreement? Are you fucking kidding me? That’s the punishment? The government’s negotiators couldn’t hold firm on forcing HSBC officials to completely wait to receive their ill-gotten bonuses? They had to settle on making them ‘partially’ wait? Every honest prosecutor in America has to be puking his guts out at such bargaining tactics. What was the Justice Department’s opening offer–asking executives to restrict their Caribbean vacation time to nine weeks a year?”

“So you might ask,” Taibbi writes,

“what’s the appropriate penalty for a bank in HSBC’s position? Exactly how much money should one extract from a firm that has been shamelessly profiting from business with criminals for years and years? Remember, we’re talking about a company that has admitted to a smorgasbord of serious banking crimes. If you’re the prosecutor, you’ve got this bank by the balls. So how much money should you take?”

“How about all of it? How about every last dollar the bank has made since it started its illegal activity? How about you dive into every bank account of every single executive involved in this mess and take every last bonus dollar they’ve ever earned? Then take their houses, their cars, the paintings they bought at Sotheby’s auctions, the clothes in their closets, the loose change in the jars on their kitchen counters, every last freaking thing. Take it all and don’t think twice. And then throw them in jail.”

But there’s the rub and the proverbial fly in the ointment. The government can’t and won’t take such measures. Far from being impartial arbiters sworn to defend us from financial predators, speculators, drug lords, terrorists, warmongers and out-of-control corporate vultures hiding trillions of taxable dollars offshore, officials of this criminalized state are hand picked servants of a thoroughly debauched ruling class.

Writing for the World Socialist Web Site, Barry Grey observed: HSBC “was allowed to pay a token fine–less than 10 percent of its profits for 2011 and a fraction of the money it made laundering the drug bosses’ blood money. Meanwhile, small-time drug dealers and users, often among the most impoverished and oppressed sections of the population, are routinely arrested and locked up for years in the American prison gulag.”

“The financial parasites who keep the global drug trade churning and make the lion’s share of money from the social devastation it wreaks are above the law,” Grey noted.

“Here, in a nutshell,” Grey wrote, “is the modern-day aristocratic principle that prevails behind the threadbare trappings of ‘democracy.’ The financial robber barons of today are a law unto themselves. They can steal, plunder, even murder at will, without fear of being called to account. They devote a portion of their fabulous wealth to bribing politicians, regulators, judges and police–from the heights of power in Washington down to the local police precinct–to make sure their wealth is protected and they remain immune from criminal prosecution.”

Regarding America’s fraudulent “War on Drugs,” researcher Oliver Villar, who with Drew Cottle coauthored the essential book, Cocaine, Death Squads, and the War on Terror: US Imperialism and Class Struggle in Colombia, told Asia Times Online, it is a “war” that the state and leading banks and financial institutions in the capitalist West have no interest whatsoever in “winning.”

When queried why he argued that the “war on drugs is no failure at all, but a success,” Villar noted: “I come to that conclusion because what do we know so far about the war on drugs? Well, the US has spent about US$1 trillion throughout the globe. Can we simply say it has failed? Has it failed the drug money-laundering banks? No. Has it failed the key Western financial centers? No. Has it failed the narco-bourgeoisie in Colombia–or in Afghanistan, where we can see similar patterns emerging? No. Is it a success in maintaining that political economy? Absolutely.”

Equally important, what does the impunity shamelessly enjoyed by such loathsome parasites say about us?

Have we become so indifferent to officially sanctioned crime and corruption, the myriad petty tyrannies and tyrants, from the boardroom to the security checkpoint to the job, not to mention murderous state policies that have transformed so-called “advanced” democracies into hated and loathed pariah states, who we really are?

As the late author J. G. Ballard pointed out in his masterful novel Kingdom Come, “Consumer fascism provides its own ideology, no one needs to sit down and dictate Mein Kampf. Evil and psychopathy have been reconfigured into lifestyle statements.”

Paranoid fantasy? Wake up and smell the corporatized police state.

Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, he is a Contributing Editor with Cyrano’s Journal Today. His articles can be read on Dissident Voice, Pacific Free Press, Uncommon Thought Journal, and the whistleblowing website WikiLeaks. He is the editor of Police State America: U.S. Military “Civil Disturbance” Planning, distributed by AK Press and has contributed to the new book from Global Research.

Nigerian Crime Syndicates And Their Routes To Europe And The West

Map of Nigeria Español: Mapa de Nigeria (credit: Wikipedia)

Nigerian crime syndicates, often considered by law enforcement officers as 'organized crime', have gained a certain international notoriety, particularly in the fields of drugs and fraud. Nigerian groups are famous globally and operate in more than 80 other countries of the world.  Their financial frauds just in the US alone cost an estimated $1 billion to $2 billion each year. Schemes are diverse, targeting individuals, businesses, and government offices.

Criminal organizations from Nigeria typically do not follow the mafia-type model followed by other groups. They appear to be less formal and more organized along familial and ethnic lines, thus making them less susceptible by infiltration from law enforcement. Police investigations are further hampered by the fact there are at least 250 distinct ethnic languages in Nigeria. Other criminal gangs from Nigeria appear to be smaller-scale freelance operations. Most Nigerian organized crime syndicates are of Igbo or Yoruba origin.

Nigerian criminal groups are heavily involved in drug trafficking, shipping heroin from Asian countries to Europe and America; and cocaine from South America to Europe and South Africa. The large numbers of ethnic Nigerians in India, Pakistan, and Thailand give their gangs ready access to around 90% of the world's heroin. In the United States, Nigerian drug traffickers are important distributors of heroin, from importing it into the country to distribution level and selling it to lower-lever street gangs.

Confraternities

Some Nigerian crime syndicates origins can be traced backed to confraternities. In Nigeria, a confraternity is a group that is nominally university-based, though 'street and creek' confraternities began in the 1990s. By the 1990s, many confraternities largely operated as criminal gangs, called "campus cults".

The Family Confraternity (the Campus Mafia or the Mafia), which modelled itself after the Italian Mafia emerged. Shortly after their arrival, several students were expelled from Abia State University for cheating and "cultism", a reference to the voodoo-practising confraternities, which marked the beginning of a shift of confraternity activities from the university to off campus.

The Brotherhood of the Blood (also known as Two-Two (Black Beret)), another notorious confraternity, was founded at Enugu State University of Science and Technology. Another cult, the Victor Charlie Boys, was established by Augustine Ahiazu when he was vice-chancellor of the Rivers State University of Science and Technology. The cults established in the early 1990s are legion; they include Second Son of Satan (SSS), Night Cadet, Sonmen, Mgba Mgba Brothers, Temple of Eden, Trojan Horse, Jurists, White Bishops, Gentlemen Clubs, Fame, Executioners, Dreaded Friend of Friends, Eagle Club, Black Scorpion, Red Sea Horse and Fraternity of Friends.

The majority of confraternities, as of 2005, were engaged in a variety of money-making criminal activities, ranging from armed robbery drug trafficking and kidnapping. Cult members may also get money from political figures, who wish to intimidate their opponents. The exact death toll of confraternity activities is unclear. In the Niger River delta, confraternities are deeply enmeshed in the conflict in the oil-rich delta. Most of the campus cults have been accused of kidnapping foreign oil workers for ransom, while many of the militant groups, such as the Movement for the Emancipation of the Niger Delta (MEND), employ confraternity members as combatants.

South Africa Dominance

The most profitable activity of the Nigerian groups is drug trafficking: delivering heroin from South-east and South-west Asian into Europe and the U.S. and cocaine from South America into Europe and South Africa. Large populations of ethnic Nigerians in India, Pakistan, and Thailand have given these enterprises direct access to 90 percent of the world’s heroin production. The associated money laundering has helped establish Nigerian criminal enterprises on every populated continent of the world.

Nigerian crime syndicates have come to dominate the cocaine market in South Africa. More than 60 000 Nigerian citizens have settled in South Africa during the past decade. According to senior detectives, a well-connected network of numerous small and autonomous Nigerian syndicates, consisting of five or six individuals, has been established to ensure domination in the cocaine market. Most of these syndicates operate from Johannesburg, but some have recently moved into more distant areas such as Sea Point in Cape Town. The individuals belonging to each of the many small syndicates each have their specific tasks and expertise.

When cocaine supplies need to be acquired from South America, each member of a syndicate would have to make a financial contribution into a common fund for the syndicate. The network of Nigerian cocaine syndicates is well-established enough to know when other Nigerian syndicates have gone through the same exercise and when the time is therefore ripe to obtain another shipment of cocaine from abroad. Representatives from different small syndicates, normally the buyers from each syndicate, will then meet, pool their resources, and arrange for one individual to take over the responsibility of obtaining a shipment of cocaine from South America.

The Nigerian syndicates have direct contacts in Brazil and in other South American countries. Most transactions are paid for in cash, although it has happened that such syndicates have resorted to the export of South African dagga in order to pay for cocaine. Upon arrival in South Africa, the cocaine would be divided proportionally amongst all the syndicates who have contributed financially to the particular venture.

No single, large mafia-like Nigerian syndicate is therefore operating in the country and no ‘Mr Big’ has been identified among the Nigerian crime syndicates. The enormous profits that can be made through cocaine smuggling make for a very competitive environment, but there is more than enough opportunity for every syndicate involved to make vast profits. Detectives who have intimate experience of Nigerian syndicates, after having worked with them, maintain that the going purchase price for one kilogram of pure cocaine was $12 500 in South America (cocaine of maximum purity is 90 per cent pure).

According to the police, once the cocaine has arrived in South Africa and it has been sold by a syndicate after significantly diluting its concentration, the original one kilogram, now in its diluted form, is sold for $100, 000. While some overhead expenses will have to be deducted, it is clear that enormous profits are being made through this form of transnational organised crime.  According to the police, members of the Nigerian syndicates who receive their share of the profits, tend to send most of their proceeds back to Nigeria rather than investing it in South Africa.

Mafia Connection

In their homeland, Nigerian criminals have managed to change their status from intermediates working on behalf of Mexican and Colombian cartels to controllers of the import-export business, even in countries such as Guinea-Bissau, Ivory Coast and Kenya. Drugs are then sent to Europe, mainly to Spain and Italy, two territories of business controlled by Italian Mafia  And they mainly deal with the Casalesi clan.

The Casalesi clan is a clan within the Camorra, an Italian criminal organization, operating from Casal di Principe in the province of Caserta between Naples and Salerno. Formed by Antonio Bardellino, it is a confederation of clans in the Caserta area. The Camorra is a Mafia-type criminal organization, or secret society, originating in the region of Campania and its capital Naples in Italy. It is one of the oldest and largest criminal organizations in Italy, dating back to the 18th century.

In recent years, various Camorra clans have been forming alliances with Nigerian drug gangs and the Albanian Mafia, even going so far as to intermarry. The first town that the Camorra gave over to be completely governed by a foreign clan was Castel Volturno, which was given to the Rapaces, clans from Lagos and Benin City in Nigeria. This allowed them to traffic cocaine and women indentured to sex slavery before sending them across the whole of Europe. The Casalesi clan is heavily involved in the cement and milk industries as well as the international drug trade, supplying drugs to the Mafia in Palermo and having alliances with Albanian mobsters and Nigerian crime syndicates. Their total assets are estimated to be worth around 30 billion euros

"Nigerian criminals are able to make agreements with everybody, from Colombians to the Chinese, but in Italy they have found two elements: a local mafia who controls the territory and Italian clients who are always looking for Nigerian women," says Giovanni Conzo, an anti-mafia prosecutor from Naples who has been investigating Nigerian criminal groups for years.

Conzo and his men discovered a huge human-trafficking and drugs-smuggling Nigerian ring in the area of Naples and Castel Volturno. A number of people were arrested in 2008 but others are still fugitives. "We have also discovered a new trend," he says. "Today, they traffic drugs using European mules from the former Eastern block. In the past, they were controlled by our criminals; now, they are in control."
A recent report from an Italian anti-mafia agency painted a worrying picture about the gangs' growing reach: "Nigerian organised crime is growing in many Italian regions, with Umbria, Campania and Emilia Romagna on top."

According to the report, Nigerian criminals are the only international gangs who are able to make agreements with everybody, from the Italian mafia to Latin America's cartels. It's a characteristic that has won them the business of drug smuggling between Africa and Europe. But they're not getting away with it completely. In 2010, 36 members of the Nigerian mafia (affiliated with the local groups of the Black Axe and the Eiye) were sentenced to more than 400 years in prison for human trafficking, drugs smuggling, slavery and murder, as hundreds of witnesses kept telling the judge the same story.

The two groups – what remains of the former university's confraternities, now considered illegal in Nigeria – were using death threats against other Nigerians to enslave them in their illegal businesses . "One of them approached me as I was going back to my place," a Nigerian victim told to the court. "They wanted me to become a member of the Eiye, but I said no. After few days, I was sitting at a local café and they came to talk to me. I went out and I was surrounded. They took their axes out and started beating me.... They even cut my penis and I will never be able to have children."

Mode Of Operations

Nigerian traffickers have developed global smuggling routes. These routes usually originate in Thailand or Pakistan, where heroin may be purchased at wholesale prices. The heroin is then easily transported through Europe and Africa with routes terminating in America's major cities.

In recent years, Nigerian traffickers have expanded their operations by smuggling South American cocaine into Europe where prices are higher and profit margins greater than those in the United States. As the proliferation of these Nigerian couriers has increased, law enforcement has responded with greater scrutiny. The prevalent use of fraudulent documents by couriers has made identifying and apprehending these individuals extremely problematic. Nigerians employ a vast army of couriers with a variety of backgrounds. Nigerian traffickers recruit Westerners, women with children, families, college students, and individuals travelling abroad who will not attract the attention of law enforcement authorities.

The average pay for couriers is $3,000 to $5,000 per trip, depending on the amount of the drugs being smuggled and the courier's past success. Nigerian traffickers will rarely have a courier transport heroin from the source country to the destination. Instead, one courier will transport the heroin partway, for example, to Europe, while another courier will be utilized to transport the shipment to another destination. For some operations even a third courier may be used to transport the drugs into the United States. This allows the organization and its members a greater degree of insulation as couriers rarely know the other couriers employed on the routes or their final destination.

In addition, it allows narcotics to be transported into the country from locations which do not arouse suspicions, since no record of source country travel is evident. Flights sometimes can contain Nigerian organizational members who may supervise or report on the couriers and their activities. Often couriers are not aware of individuals monitoring their travel.

In a few instances, Nigerian heroin traffickers have recruited disabled individuals to smuggle heroin from West Africa to the United States. Intelligence obtained from one DEA investigation indicated the Nigerian trafficking organization recruited disabled people to smuggle heroin in to the United States. This organization solicited invitations from supporting events such as the Special Olympic Games, and then secured a visa for the courier to travel. None of the couriers participated in the sporting events, but instead would deliver the heroin to the United States and then return to Nigeria.

Air travel still remains vital to Nigerian smuggling ventures. Nigerians have tailored their smuggling techniques to limit detection and to take advantage of the profitability of smuggling heroin, which is far more valuable than similar amounts of cocaine.

In the 1990's, Nigerians lost large quantities of heroin and dozens of couriers annually to law enforcement operations. In an effort to insulate their trafficking operations, Nigerian traffickers in 1996 began mailing heroin in one or two kilogram quantities from South-east Asia and Pakistan to the United States. The use of express mail service has become a popular heroin trafficking method.

Other highlights of the global snapshot on Nigerian activities include Brazil, where apparently Nigerian groups employ about 1,500 people, export 10 tons of cocaine a year, and engage in barter of cocaine and heroin. Other countries where they are active include the Philippines, Cambodia, Hungary, Germany, Czech Republic, Singapore, and of course the United States and Britain. So that gives you a sense of the extensiveness.

 Adaptability

Nigerian criminal organizations are very flexible and very innovative. They adapt easily to the host society. In Britain, they have become adept at obtaining welfare benefits using a myriad of false identities and links with fellow countrymen who work inside national and local agencies where there is access to financial data and personnel records. They really exploit the people in the system.

Preparation

Nigerian Crime Syndicates do considerable research in identifying potential targets for 419 fraud. A professor at the University of Pittsburgh was the recipient of a Nigerian fraud letter, which actually included his middle name—a name he never uses and none of his colleagues actually knew. The Nigerians had discovered his middle name and included it in the letter. It shows they had done a lot of work.

Organisation

Another characteristic of Nigerian Crime Syndicates is that they are well organized, there are three kinds of Nigerian organizational structure. The first is the old-fashioned pyramid or hierarchy. There are major organizers, many of whom are in Lagos, and are linked with significant numbers of criminal operations elsewhere in the world. These are crime barons, often members of the elite and members of government, who benefit from activities that they coordinate or support. They are also among the beneficiaries of the proceeds of crime that come back to Nigeria. They protect those proceeds from seizure under Nigeria's very poorly implemented money laundering laws.

The second type of structure is the flexible network. Many Nigerian criminal organizations are relatively small, and they are based around bonds created by family membership, tribal affinity, or personal friendship. These groups operate within a larger network that resembles trade associations rather than traditional Mafia hierarchies. The fluid network provides support, structure and potential connections.

The third type of group is the self-contained cell in which there are a few people with specific responsibilities and a clear cut division of labour  These cells are independent entities and take the initiative in generating and exploiting criminal opportunities.

Future Trends

Let me now turn to current trends and future directions in Nigerian organized crime. One we have seen that's very important is the transition from employees to employers and from couriers to managers. Nigerian criminal groups and Nigerian criminals have graduated from working for others to becoming organized smugglers in their own right. I think this has partly been in response to the profiles law enforcement has developed. They become very adept at recruiting non-profile couriers, including females in the target country, and even in one case 20 servicemen who were recruited in 1996 to courier drugs from Istanbul to Rome. We should increasingly expect this managerial role to continue in the future.

Second, I think there is increasing imitation of Nigerian criminals by other West Africans and increasingly citizens elsewhere in Africa. In Britain, for example, law enforcement doesn't talk about Nigerian crime, it's West African crime—predominantly, but not exclusively, Nigerians and Ghanians.

The third trend is the upward trajectory of the Nigerian crime problem. There are long-term structural factors that will lead to an intensification of this problem on a global scale. The most important is population growth. According to some estimates, by 2010, the Nigerian population will be so large that domestic oil production will not be sufficient to meet the country's needs and Nigeria will become a net importer of oil, in spite of its large-scale production. Amidst growing impoverishment in the country, crime will be an increasingly attractive career path for young Nigerians.

Fourth, another projection. Nigeria will continue to be a safe haven from which criminals can operate. Much of course will depend on what happens to the political system. But I have my doubts that we are going to see fundamental change because I think a lot of the crime and corruption is so deep rooted.

The fifth trend is toward growing sophistication. Many Nigerian criminals are well educated with excellent language skills. I think we will see growing use of computers and other technologies.

Sixth, we will see more efforts to infiltrate government agencies by Nigerian criminals. This is happening in Britain. In the Benefits Agency, Nigerians and Ghanians made up 5 percent of the staff, but accounted for almost 90 percent of the internal fraud. I think that is a significant figure.

Another trend is toward diversity in trafficking. Nigerians are not wedded to any particular drug. Cocaine or heroin, they don't care. They don't produce. So they can increasingly follow the fashion. Consequently, we should expect that they will increasingly become involved in trafficking synthetic drugs such as methamphetamine.

Finally, although there might be some move toward greater concentration of power and authority in the Nigerian criminal world, Nigerian drug traffickers are set to become increasely important players in the global drug trade through rationalization and consolidation, if only to counter the international law enforcement efforts which are increasingly targeting Nigerian criminal groups.

african-business

Drugs, Money Laundering, HSBC, Greece, & A Whistleblowing Journalist Vindicated

by Tom Burghardt
Antifascist Calling...

Earlier this month, Greek investigative journalist Kostas Vaxevanis was acquitted by an Athens court of charges that he breached data privacy laws with the publication of a list of tax cheats and money launderers. Vaxevanis, who publishes the investigative news magazine Hot Doc, faced two years in prison and a 30,000 Euros fine over that publication's outing of 2,000 Greeks who hold secret banks accounts at HSBC's private banking arm in Switzerland.

Known as the "Lagarde List," data on high-profile offenders had been transferred to Greek authorities by Christine Lagarde, the former French Finance Minister and current head of the International Monetary Fund (IMF), where it languished for two years. While the Greek people are forced into abject poverty under an "austerity" regime designed to enrich their corporate masters, a criminal class of political overseers backed by brutal police and rampaging of the far-right billions of euros were shielded as successive "left" and "right" governments failed to act.


Insider Leaks

The Vaxevanis arrest was unique in one respect: unlike official probes into drug money laundering, tax fraud and terrorist financing by major banks, explosive allegations of widespread financial corruption was kick-started by a journalist's investigative digging despite government complicity and cover-up. And as with other major disclosures which have come to light in the last decade -from the Iraq-Niger uranium fraud, the Downing Street Memo or spying on UN officials by Western intelligence services- Hot Doc's revelations began with insider leaks from a whistleblower.

The source of Madame Lagarde's List was Hervé Falciani, a computer services specialist with HSBC Private Bank (Suisse) N.A., who supervised data migration on individual accounts. Increasingly troubled by the bank's dubious practices, for two years beginning in 2006, he mirrored account information onto his laptop. In 2008, an international arrest warrant was issued by Swiss authorities; however, they committed a serious error. Falciani, a dual French-Italian citizen whom neither country would extradite, was picked up in Nice. When French prosecutors, acting on behalf of Swiss police, searched his home and seized his laptop, they discovered files on 130,000 alleged tax evaders.

Rather then arresting Falciani, they opened an investigation into the alleged tax evaders. When French authorities let it slip to the media that had files on some 3,000 Swiss HSBC account holders and that they would prosecute, they recuperated some €1.2 billion ($1.5bn) in unpaid taxes from profligate citizens. In the interim, a diplomatic row ensued; Switzerland accused France of using stolen data and the French countered, threatening to have Switzerland added to the OECD Tax Haven Black List. Over Swiss objections, then Finance Minister Lagarde shared the data with tax officials in cooperating countries.

Arrested in Barcelona on July 1, Swiss authorities are demanding Falciani's extradition to Switzerland where he faces charges of data theft and violation of bank secrecy laws. If convicted, Falciani faces a three-year prison term and a fine that could top 200,000 euros. Revelations contained in those leaked files touched off major probes across Europe. In Italy, Italian Treasury officials recovered some 570 million euros from HSBC account holders.

In Spain, the high-profile investigation into the finances of the banking clan led by Emilio Botín, the wealthy Chairman of the Santander banking dynasty caused a sensation. And why wouldn't it? Like Greece, Spain's working class is confronted by demands from international lenders to impose draconian austerity measures, including some 37 billion euros in budget cuts in the face of a severe recession and record-high unemployment.

Last spring, El País reported that "Botín, his daughter Ana Patricia Botín (the head of Santander's British banking unit), his brother Jaime and five of his brother's children were among the names of 659 Spanish residents who hold secret Swiss accounts at HSBC Private Bank, with a combined value of some six billion euros."

Confronted by public outrage and threats of criminal prosecution by Spanish authorities over allegations of tax fraud, the Botín clan caved-in and ponied-up 200 million euros.
In a report last summer on Switzerland's extradition request, El País reported, "now that Falciani is being held in a Spanish jail, the High Court is faced with a legal problem, according to judicial sources." Why might that be the case?

    "The information coming from Falciani's database has already been used to prosecute Spaniards and no one in Spain has presented a complaint against the former HSBC computer analyst for 'stealing' private bank records."

The most serious hurdle which Swiss authorities must overcome are that allegations against Falciani are not considered criminal offenses in Spain.

    "In fact," El País noted, "the Law for the Prevention of Money Laundering states that banks have the obligation to report any illicit activities. This might not apply to Falciani because he was only an employee, but the results from the hundreds of investigations opened in Spain because of his list prove that he complied with the law."

The same cannot be said for HSBC, Santander or other financial giants considered "too big to fail, or jail." After his July arrest, The Daily Telegraph reported Falciani as saying that "he took the customer details in order to expose tax evasion among HSBC's customers," considering it his "civic duty."

    "If you discover that...offshore structures have no other aim than to avoid taxation and that the sole legitimacy of these structures is that purpose," he asked, "what would you do?"

Why you expose the bastards, of course! This wouldn't be the first time the hammer of "justice" came crashing down on a financial insider who exposed gross financial chicanery, while state officials allowed perpetrators to walk.

Moves against Falciani by the Swiss government are reminiscent of the U.S. Justice Department's 2008 prosecution of UBS whistleblower Bradley Birkenfeld. A former UBS banker in Switzerland, Birkenfeld blew the lid off a massive scheme by the bank to illegally hide 19,000 U.S. client accounts squirreled away in dodgy offshore tax havens for purposes of money laundering and tax fraud. The IRS has calculated that the total cost in lost revenue stolen from the American people by wealthy elites may be in excess of $100 billion annually. This however, pales in comparison to the so-called "tax gap"--the gap between taxes owed and collected. Former IRS Commissioner Charles Rossotti told PBS Frontline nearly a decade ago that the "biggest single source" of the problem are abusive offshore tax shelters which account for an estimated $250 to $300 billion in uncollected revenues; the equivalent of a 15 percent surtax on everyone else.

A U.S. Senate panel at the time, recalling their recent investigation of HSBC, accused UBS and Liechtenstein's LGT Group of marketing tax fraud strategies to rich Americans. In 2009, UBS agreed to pay $780 million in fines and the Treasury Department recovered some $20 billion in unpaid taxes. However, not a single UBS official was criminally prosecuted, or even charged, the result of a sweetheart "deferred prosecution agreement" negotiated with the Justice Department. Such deals result in little more than a slap on the wrist for well-connected offenders and are considered to be a small cost of doing business.

Readers will recall that the 2010 deferred prosecution agreement cobbled together between the Justice Department and Wachovia Bank led to a microscopic $160 million fine despite strong evidence that the bank, now owned by Wells Fargo, as Bloomberg Markets magazine revealed, had laundered upwards of $378 billion for Colombian and Mexican drug cartels.

As for Birkenfeld? Despite his testimony and cooperation with the federal government in exposing massive fraud by UBS, he was tried and sentenced to 40 months in prison. He pled guilty in 2008 for helping Florida real estate billionaire Igor Olenicoff stash more than $350 million offshore according to Olenicoff's Forbes profile. However, federal prosecutors lied to the judge when they claimed during his sentencing hearing that he had not exposed Olenicoff's fraud; in fact, he had, on multiple occasions, beginning with his 2007 testimony before the U.S. Senate Permanent Subcommittee on Investigations. Set to be released this month, Birkenfeld, whom the New York Daily News said deserved "a statue on Wall Street," was eventually paid a $104 million award by the IRS in September for acting as a corporate whistleblower.


Another Day, Another Filthy HSBC Scandal

When news of the Falciani leak went public, Alexandre Zeller, the chief executive of HSBC's Swiss subsidiary said at the time, "We deeply regret this situation and unreservedly apologize to our clients for this threat to their privacy." Press reports failed to mention whether HSBC apologized to European taxpayers for the role they played in continent-wide tax fraud. The multinational banking giant stands accused by U.S. Senate investigators of smoothing the way for terrorist financiers and money laundering drug cartels.

Vaxevanis's revelations over the bank's secret Swiss accounts comes at a time when HSBC is "actively engaged" in settlement talks with federal prosecutors. Fines for serious breaches of U.S. banking laws could now reach upwards of $1.5 billion (£940m), The Guardian reported.

According to The New York Times, "prosecutors are considering criminal charges related to money laundering, according to several law enforcement officials with knowledge of the matter. It would be the first such case stemming from the broad investigation."

Despite these facts, and despite claims by current CEO Stuart Gulliver that HSBC's criminal practices were "regrettable" and that the bank "failed to spot and deal with unacceptable behavior," British tax authorities "obtained details of every British client of HSBC in Jersey after a whistleblower secretly provided a detailed list of names, addresses and account balances earlier this week," The Daily Telegraph disclosed.

Among those receiving the red carpet treatment at HSBC's Jersey branch were drug dealer Daniel Bayes, currently on the lam in Venezuela, "Michael Lee, who was convicted of possessing more than 300 weapons at his house in Devon; three bankers facing major fraud allegations and a man once dubbed London's 'number two computer crook'."

According to the Telegraph, the list "identifies 4,388 people holding £699 million in offshore current accounts and they are also likely to have billions of pounds more in investment schemes. Several celebrities and other well-known figures are understood to be identified in the client data." Unsurprisingly, HSBC's Jersey client list is "heavily dominated by senior figures in the City. Dozens of bankers are understood to have deposited six-figure sums offshore with some institutions said to have 'clusters' of employees taking advantage of the accounts."

    "One investment manager has more than £6 million in his account," the Telegraph noted, "while the average amount held is £337,000. Under Britain's non-domicile rules, those with foreign roots only have to pay tax on money entering Britain--provided it is earned abroad. However, more seriously for HSBC, dozens of people with no obvious legal source of substantial income are holding large sums in Jersey."

In other words, like their North American banking affiliate, HBUS, accused of laundering billions of dollars for Mexican drug cartels, HSBC Jersey may be a conduit for European drug syndicates seeking a safe harbor for illicit wealth. Richard Murphy, a prominent British tax accountant and campaigner against offshore tax havens like Jersey told The Daily Mail the leaked HSBC accounts could be the "tip of the iceberg." Murphy added: "This bank was clearly out of control. It confirms what we've begun to realise, that this is a bank that was, during the period that the Reverend Lord Stephen Green was in charge, the world's biggest money-launderer." It now appears from these latest revelations this continues to be the case.

Contradicting claims made in sworn testimony before the Senate Permanent Subcommittee on Investigations last summer that the bank would "apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong," they were singing another tune last week when the Telegraph story broke. A bank spokesperson averred: "HSBC has a duty of confidentiality and cannot comment on clients even to confirm or deny they are clients. We have good relationships with our regulators and co-operate with investigations when required to do so." Translation: "if you catch us in the act we'll 'fess up, otherwise mum's the word chumps!" More recently, The Daily Mail reported that "hundreds of tax dodgers" on the Lagarde List "will escape prosecution and will be allowed to keep their identities hidden."

Despite the fact that some "6,000 British names linked to HSBC bank accounts in Geneva were handed to the tax authorities in 2010 by Mrs Lagarde," HM Revenue and Custom's officials "have decided to offer them immunity in exchange for payment of a penalty and their tax bills."

While "critics have accused tax officials of offering immunity deals to almost everyone on the HSBC list, whether they owe a few pounds or billions," HMRC handed tax fraudsters a cozy arrangement which protected their anonymity and simultaneously shielded serious offenders from prosecution, the Mail disclosed.

Trifling details such as these shouldn't surprise anyone. As the Tax Justice Network pointed out, British tax officials "had sold off 650 of their offices to a company called Mapeley Steps Ltd., a company owned in Bermuda, and leased them back for 20 years." Mapeley is now owned by the U.S. private equity firm, Fortress, "headquartered in the tax haven of Guernsey. Now private equity firms make a lot of money for their owners--and note carefully that does not mean they make a lot of money for their foolish investors." It turns out the "company has now revealed a £103m loss and the directors admit that there are material uncertainties as to the group as a going concern." Ironically enough, guess who might own Mapeley if it goes under? You guessed right if you said: "Britain's tax offices will become the property of its bankers."






Talk about "state capture"!

But it gets worse. As Rowan Bosworth-Davies, a former financial crimes specialist with London's Metropolitan Police observed on his web site Friday, Britain's Financial Service Authority (FSA) are utterly clueless when it comes to cracking down on illegal drug money laundering by British banks.

    "The importance of this question is that it goes right to the heart of the whole responsibility of the FSA for regulating one major element of the UK financial market," Bosworth-Davies wrote, "the element of money laundering. Yet the answers appear to be frankly unsatisfactory, complacent, almost evasive, although the first answer from Lord Turner, boss of the UK's financial regulatory agency, was right on the money when he said: 'I would have to say that I do not know the answer to that...'"

Commenting on hearings in the House of Commons by its Home Affairs Committee into the illegal proceeds of the narcotics trade washed through British banks, the former Met detective wrote that "FSA lost the plot a long time ago."

    "As a result, the industry they sit above generally despises them, and ignores them most of the time. How else can you interpret the level of financial criminality that goes repeatedly unpunished, the level of organised criminality which is endemic within the British banking sector, and the criminogenic culture which permeates the sector."

In the face of pervasive corruption and official negligence which crosses the line into outright complicity, Bosworth-Davies wonders: "Can we expect prosecutions now to be brought against HSBC as a result of the Jersey revelations today, which are clearly so blatant and so scandalous as to be nothing more than a direct challenge to the authority of the law. Might be ok if we had a prosecuting authority willing to take responsibility to bring a case, but I wouldn't hold your breath!"


"Austerity" Regimes: Fronts for Global Crime

The problem of money laundering, tax fraud and the illegal offshoring of wealth isn't solely an issue for Britain, Greece or for that matter, the United States: it is a global phenomenon. One which clearly demonstrates, as economic analyst Michel Chossudovsky, the director of the Center for Research on Globalization has long observed, represents the "criminalization of the state," that is, the end stage of a capitalist system in terminal crisis.

On the one hand, the managed drug trade overseen by wealthy banking elites, and exploited as a tool by Western intelligence services, and on the other, moves to impose "fiscal austerity" on a planetary scale would seem to be unrelated phenomenon. On the contrary, they represent two sides of the same coin, the upward transfer of wealth by well-connected insiders seeking geopolitical advantage for those in on the game.

Indeed, the same crooked bankers now demanding that supposedly "irresponsible" governments get their "fiscal houses in order" are the very miscreants who thrive on the chaos arising from laundered drug money andfinancial speculation.

Although Hot Doc's publication of secret HSBC accounts embarrassed the Greek government and their European paymasters, moves to reduce Greek workers to abject poverty continue apace.

With the Greek government knuckling under to "austerity" measures demanded by the European Central Bank (ECB), European Union (EU) and the IMF, a new €31.5bn ($39.9bn) "bailout"--designed to indemnify hyena bankers, not struggling Greeks, from losses--will impose ever-harsher conditions on the working class.

Lining the pockets of institutional lenders who drove the crisis in the first place, let's call the raft of complex cross-currency "swaps," dodgy derivatives and "rescue packages" what they are: a filthy grift which Greeks are forced to pay with their lives.

Quite naturally, such measures are viewed as a splendid means to bailout financial speculators in Berlin, Wall St. and the City of London responsible for looting the Greek economy. And if millions of people are consigned to the scrap heap? Well, tough luck suckers!

In the context of endemic corruption and massive fraud among wealthy elites, it is no surprise that Lagarde's list was passed to Greek officials--and ignored--more than two years ago. According to multiple press reports, the list was buried by successive governments. Among those charged with the cover-up were officials from the right-wing New Democracy party led by current Prime Minister Antonis Samaras and former Prime Minister George Papandreou's fake "socialist" PASOK organization.

    "In the two years since it had been handed to Greek authorities by the IMF's chief Christine Lagarde," The Guardian reported, "the infamous tally of suspected tax evaders had caught the popular imagination ... the failure of successive governments to act on the list and crack down on tax evaders had raised suspicions that corrupt vested interests ran to the top of society."

Greece, Vaxevanis wrote in The Guardian, is an "exclusive club of powerful people" which "engages in illegal practices, then pushes through necessary laws to legalise these practices, granting itself an amnesty, and in the end, there are no media to uncover what really happened."

    "The 'Lagarde' case in Greece is merely an extreme expression of this situation," Vaxevanis averred.
    "In 2010, Lagarde handed to the then minister of finance, George Papaconstantinou, a list of Greeks who held bank accounts abroad. Some of this was 'black money'--money that may not have been taxed or needed to be laundered."
    "In a convoluted train of events," Vaxevanis noted, "Papaconstantinou admitted to losing the original data, but was able to pass another copy to his successor Evangelos Venizelos, who eventually admitted to having held it but has failed to produce it so far. The list has still never been properly investigated."
    "It is quite clear the political system did everything not to publish this list" he said.

"If you look at the names, or the offshore companies linked to certain individuals, you see that these are all friends of those in power," he told the Guardian during a recess in his recent trial.

    "We live in a country where, on the one hand, tax evasion is rampant and, on the other, people are eating out of rubbish trucks because of salary cuts, because they can't make ends meet."
    "They can no longer play hide and seek," Vaxevanis told The Daily Telegraph, "and they cannot demand the little old lady in a village to make more painful sacrifices and have her pension cut when a small group of oligarchs continues to grow wealthy."

In a Reuters interview the journalist said that "the main problem in Greece is the people who govern it. It is a closed group, an elite, one part of which is composed of people from all the parties and the second connected directly or indirectly to business people."

Sound familiar?

It should.

And if you think "austerity" is a game that only the Europeans are playing, better think again! With talk of a "grand bargain" in Washington over an alleged "fiscal cliff," Hope and Change™ grifter Barack Obama, feckless Democrats and their Republican brethren are planning to implement a program that will slash the federal budget deficit through massive cuts in education, health care and social spending while leaving the Pentagon's bloated budget virtually untouched. With "comprehensive tax reform" in the offing, the sole beneficiaries will be giant corporations and the rich who will continue to launder trillions of dollars in "non-taxable" wealth offshore.

Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, an independent research and media group of writers, scholars, journalists and activists based in Montreal, he is a Contributing Editor with Cyrano's Journal Today. His articles can be read on Dissident Voice, Pacific Free Press, Uncommon Thought Journal, and the whistleblowing website WikiLeaks. He is the editor of Police State America: U.S. Military "Civil Disturbance" Planning, distributed by AK Press and has contributed to the new book from Global Research, The Global Economic Crisis: The Great Depression of the XXI Century.

Is The CIA Using Drug Money to Overthrow Ecuador President Rafael Correa? (VIDEO)

 

For translation, click on the CC (captions) widget, choose Spanish, then select Translate and English (or preferred language and then click on expand screen to read. THIS IS A MUST WATCH).

The Central Intelligence Agency (CIA) is using drug money to fund Rafael Correa’s opposition in the coming 2013 Ecuadorian elections, intelligence sources have revealed to Chilean independent media. The accusations do not stand alone. In October, former UK diplomat Craig Murray said that the CIA had tripled its budget to destabilize the government of Ecuador.

The allegations were made public by President Rafael Correa on November 3rd on national television, just days after his official visit to Chile to meet with President Sebastian Piñera.

Correa reaffirmed information that appeared in an article written by Chilean independent media outlet Panoramas News, revealing that the CIA and DEA stations in Chile were running a narcotics trafficking network through that country with the full knowledge of Chilean authorities and police.

One of the sources quoted by Chilean media, a former police officer in the Policia de Investigaciones (PDI) by the name of Fernando Ulloa, said that 300 kilograms of cocaine were entering Chile monthly under the escort of members of his own institution, the Carabineros, and the Chilean Army. In May 2011, Fernando Ulloa met with then Chilean Minister of Interior Rodrigo Hinzpeter in La Moneda to inform him about the drug network. After more than one year, the Pinera’s government had done nothing to investigate the case.

The scandal resurfaced again after 10 Chilean cops were detained with links to a minor drug smuggling ring, not connected to the one Ulloa was exposing. Although Chilean television was more open to talk about police corruption, Ulloa was only interviewed by two TV networks, where he accused Minister Rodrigo Hinzpeter of covering up the larger narcotics ring he was investigating before being kicked out of his job as PDI inspector.

The links to US intelligence emerged after an anonymous source from the Agencia Nacional de Inteligencia (ANI) told Panoramas News that the smuggling of 300 kilos of cocaine was in fact a highly sensitive CIA/DEA operation that would help to raise money to topple the government of Ecuador. The operation is similar to the one carried out by the Agency in Central America during the Iran-Contra scandal in the 1980’s, the source said.

The director of Panoramas News, journalist Patricio Mery Bell, was planning to hand over the information to Rafael Correa while the Ecuadorian President was visiting Chile, but he was strangely accused of beating a woman after she stole his cell-phone. The cell-phone memory contained a video testimony of Mery’s intelligence source, destined to be passed to Correa, but it ended up in the hands of the police after the mysterious incident.

Once he was in Ecuador, President Rafael Correa connected the dots and decided to go public with the information. He quoted Murray’s early warnings about the CIA’s intent to “fund, bribe or blackmail media and officials”, originally written in the former diplomat’s own blog, adding that the Agency was dealing drugs just as Oliver North had done during the Contra support effort.

In an interview with NTN24, journalist Patricio Mery added more details to the case, relating the cover-up of the CIA drug dealing operation to the deaths of two different people in the last seven years: former soldier Fabian Vega, who was found hung in the northern city of Calama in 2005, and young citizen Nestor Madariaga Juantok, found death with two bullets in the port of Valparaiso in 2006. Both were ruled as suicides.

Mery also gave the name of the alleged CIA liaison with the Chilean Navy, former captain Jesus Saez Luna, who is now being held in a penitentiary after he mysteriously escaped from Navy custody. Saez Luna was described in his arrest as the biggest drug dealer of the coastal city of Viña del Mar, with networks in Santiago de Chile and the Bio-Bio southern region of the country. Known as “El Marino”, the former captain utilized “military intelligence” tactics to avoid detection by police,according to the Chilean newspaper La Segunda.

The case is being depicted as “Chile-Contras”, in reference to the history of CIA narcotics trafficking in Nicaragua. This is just another example of how drug money is used to fund covert operations, such as the ones we have seen in Syria, with whole guerrilla armies and opposition forces being financed to overthrow countries that aren’t part of the Anglo-American establishment and don’t bow to American corporate interests.

By Matías Rojas
Information Clearing House - The article was originally posted at Strapp Magazine

The Greek Mafia in Philadelphia PART TWO

Philadelphia (Photo credits: www.roadtrafficsigns.com)

The Philadelphia Greek mob first appeared on the grid back in the 1970′s when it was headed by Chelsais Bouras and stretched throughout the northeast. He was well versed in the old country traditions and was able to grow the family into a formidable force while staying well below the radar when compared to the Italians and Irish gangsters at that time.
That was until he was gunned down in May of 1981 inside a well known mafia hangout and Greek restaurant, Meletis, in South Philadelphia. Bouras was having dinner with the aunt of a made member of La Costa Nostra and other Scarfo associates, who we will cover when we get to the Italians. To this day there has not been an arrest made but many believe the hit was ordered to try and deter the Greek’s involvment in many of the Atlantic City projects that were taking place at that time.

What helped support that claim is the fact another made member of the Greek Mafia, Harry Peetros had been assassinated a day prior. Peetros, like many of today’s made guys was from Upper Darby, a suburb that connects to West Philadelphia. This is interesting because it’s the township that the Karalis brothers raised their families for the most part, and it’s also where Caesars Kafenion is located.

The establishment which is still there to this day was once owned and operated by Gianni Karalis prior to leaving for Greece in the early ’90s. The private social club was the center of Greek Mafia activity, holding nightly poker games, offering illegal slot machines, and the spot where many meetings were held. At least until the FBI along with other government agencies raided the coffee house expecting to turn up evidence leading to the conviction for racketeering, extortion, and even murder. Instead the only violation found was the illegal poker machines, a charge which was eventually droppped. Some believe Gianni had been tipped off, others credit the vow of silence taken, but whatever the reason, it put the wheels in motion for the Greeks to become even more low key in their dealings.

In the mid to late ’80′s the Greeks were depended upon as soilders for the Italians, who were at war amongst themselves. Fortunately for them they supported the winning side and the loyalty shown allowed for them to continue growing. The leader at this time was George Botsaris who was also from the Upper Darby area, and who also used pizzarias and diners as cover like they do today. His mistake was breaking the family rule on dealing narcotics and he was busted for organizing a massive cocaine triangle that stretched from New York City to Philadelphia to Boston, and named the “Greek pizza connection” by authorities. After fleeing to Greece in 1987 to avoid a lengthy sentence, he voluntarily returned to the U.S. after negotiating a plea through his attorney.

That takes us to the 1990′s when a couple of families decided a change was needed and that’s when the Karalis’ began to take control. Until then, the brothers had been involved in every facet of the businesses run by the Greek Mafia, but they were very old school and did everything they could to remain annonymous. From staying in the same neighborhoods and refusing to drive fancy cars, to being good family men not known for living the gangster lifestyle. This allowed them to grow in power without gaining attention and before long, together they were in control of gambling, loan sharking, and many other street rackets behind the scenes, and at the same time kept adding legitimate enterprises that remained at the forefront.

The death of Apostoli was hard on his siblings and the way in which he passed, something I will cover in the near future, also ended up playing a major role in the way the family is set up today. Though the youngest, like his son Gianni is from all his first cousins, Apostoli was the heart and soul of the family. And like his son, was the one who could be depended on to handle the most intimidating situations. There is no way to know if Gianni would have become a made member at such a young age if his father was still alive. I for one after conducting so many interviews and putting together so many pieces of this puzzle have to say yes. He’s shown to be cut from that same cloth and his street smarts together with fearlessness and acceptance of violence make him the perfect soilder and most likely leader before long. It’s said he’s now taken on most of the responsibilities in Las Vegas, and that his crew is currently making many of the decisions concerning the majority of legitimate businesses, not just the gambling and all that it involves.

Just like in Philadelphia, New York, Boston, Chicago, Detroit, Los Angeles, and Las Vegas, there are members in many parts of the world. With most of the income stemming from the rackets, their ability to open and maintain so many other businesses is what’s kept them out of the public eye. From restaurants in the form of pizzarias and diners, to bars, strip clubs, and even escort services, it’s expected that each made member operate a business of some sort. It’s been one of the rules implemented by the new regime and each member is expected to kick up through the ranks until eventually it reaches the boss or Theo.

The hierarchy is said to go in this order ; soilder, made member, lieutenant, captain, underboss, and boss. The soilders do the grunt work in hopes of becoming made guys, and the made members want to become lieutenants and be in charge of a crew. Have enough success at that level and you become a captain, and are now able to actually speak to the boss. The captain is in charge of all the levels and men below him and reports directly to the boss and is also considered to be an extension of him, so they are shown that type of respect. The underboss is the right hand of the boss and also acts as an advisor like the Italian consigliere. The big difference is the underboss in the Greek Mafia is not guaranteed the top spot when the boss either retires, something he’s allowed to do unlike the Italians, or dies. This is why it’s expected that for the Karalis faction of the Greek mob, the next in line is a captain and as it sits, who better than the one that’s been groomed for this position since the young age of 17 when his father was killed. Today he’s a well known professional sports bettor and part owner of a gambling website that features him as a handicapper. But behind that facade, he’s one of the most respected and even feared men in the rackets. Don’t let that veneer smile and charm fool you, his story is one that I’ll document and one that he’s hid very well.

When you  factor in that Gianni’s godfather is none other than Spiros Velentzas who was in charge of the Greek Mafia in New York City, and is still said to be running things from prison, it makes perfect sense. The Lucchese crime family is one of the main sponsors of the Greeks, and their good standing relationship with the other Italian families throughout the U.S. means they aren’t going away anytime soon. Just the opposite,  since the return to the U.S. of Gianni who was in Greece for over 2 yrs, a story that reads straight from a movie script but is true and one I’ll cover next, the Greeks have now joined forces with Russians, Albanians, Bulgarians, Asians, and others. When you take into account the different Greek families spread out across the U.S, Canada, and other countries, you can see their reach and influence keeps growing. In Las Vegas, the Greeks are currently in control of much of the transportation like cabs, limos, and airport shuttles, and also pizza restaurants, strip club, escorts, gambling, loansharking, amongst others.

Andreas Karalis, known as “theo” has been the least talked about mafia leader I have ever researched. Like most of that family it is almost impossible to find anything other than rumor and heresay. Without proper knowledge, one would conclude they are like any other immigrant family that came to the U.S. to prosper and was able to do exactly that with hard work. Though much of that may be true, the underlying fact is that it’s through the underworld that they’ve been able to thrive and attain power. He too will be covered in the final “tell all” installment of the Greeks.

Believe it or not, they all work hand in hand and there’s been very little bloodshed and even less power struggles over the last decade. It looks as if the various Greek families have chosen to go back to the way the Italians ran their mafia in the 1960′s. Where each family has it’s own boss and runs it’s family the way they see fit, but is also a part of something much bigger. Instead of going to war over having control of the entire Greek Mafia, they are focused on running their own families and knowing they have the loyalty and support of the others. As of this writing it is believed that there are 16 Greek families that are represented by a boss in the U.S. alone, and not surprisingly 9 are in the northeast part of the country.

We covered some of the history of the Greek Mafia here in Philadelphia and touched on the families that laid the groundwork for their involvment in the current underworld. Next I will conclude on the Greek Mafia with some of the in depth details on many of the rumors that surround their reign, and many of the facts that they’ve fought hard to keep out of the media. They are one of the most powerful mafias and also one of the least talked about at this time. That is about to change when I bring you the last installment that will feature how power was gotten and the road today’s soiders like Gianni Karalis (captain), Caesar, and Alex had to take to be in their current positions. Also I will share with you the stories of some of the other main characters who run the different Greek families in the 2010′s Philly mob. phillymob215

Related articles

• The Greek Mafia in Philadelphia PART ONE
• The Greek Mafia in Philadelphia PART TWO
• Greek Mafia in Philadelphia - PART THREE
• Greek Mafia in Philadelphia - PART FOUR